Russia Economic Forecast

From 1997 to 2007, Russia maintained an annual Gross Domestic Product (GDP) growth average of 7% but during the 2009 financial crisis, its economy contracted by a sharp 7.9 per cent. In 2010, GDP grew by 3.4%, boosted by gains in oil and energy prices.

For a long time, Russia has faced challenges dealing with its high unemployment and poverty rates. However, with an improvement in its foreign currency reserves and international finances, Russia has been able to achieve some economic stabilization.

Russia GDP Forecast

According to the World Bank, Russia’s GDP is expected to grow by 4.4% in 2011, despite higher than expected oil prices. In the same report, the World Bank identifies challenges in domestic demand and credit activities which leaves private consumption as the main engine of growth.

In April, Russian deputy Economic Development Minister Andrei Klepach announced the approved social and economic development forecast for 2012 – 2014. According to Klepach, Russia’s 2012 GDP is expected at 3.5% and is projected to reach 4.2% – 4.6% in the following years.

In the long run, as Russia closes its output gap, the pace of economy is likely to slow. However, with the right structural policies aimed at higher productivity, innovation and competition, Russia can achieve an even higher long-term growth and standard of living for its people.

Russia Unemployment Forecast

Russia is the ninth most populated nation in the world, a country that encompasses all of northern Asia, as well as 40% of the European continent. Today, the Russia population is reported to be around 142 million and of this, close to 76 million are part of the country’s labour force. Russia's unemployment rate was reported at 6.4% in 2011, dropping from 7.5% in 2010. Against the backdrop of positive growth, Russia's labour market conditions are expected to improve.

From 1999 until 2010, Russia's unemployment rate averaged 8.3%, reaching a historical high of 14.6% percent in February 1999 and a record low of 5.40 percent in May 2008.

Russia Inflation Rate Forecast

The Russian inflation rate averaged 6.8% in 2010, and by the start of 2011 had grown to 9.5%. As commodity prices and money supplies increase around the world, the Russian inflation rate is expected to remain on average over 6% every year until 2015.

Russia Current Account Balance Forecast

Fiscal consolidation began in 2010 and will continue through in the following years with the winding down of several stimulus measures. According to the finance ministry, Russian budget balance should return by 2015.

Under the current revised budget proposals for 2011 - 2013, the deficit is set to shrink to 3.6% of GDP in 2011, and less than 3% by 2013. This is in line with the expected deficit forecast of 3.2% in 2012.

Asia Pathways is a blog of the Asian Development Bank Institute (ADBI). ADBI welcomes contributions to Asia Pathways. Information on how to contribute to the blog is available at our guidelines for authors.

Located in Tokyo, Japan, ADBI is the think tank of the Asian Development Bank. Its mission is to identify effective development strategies and improve development management in ADB's developing members countries. ADBI has an extensive network of partners in the Asia and Pacific region and beyond. ADBI's activities are guided by its three strategic priority themes of inclusive and sustainable growth, regional cooperation and integration, and governance for policies and institutions.